Nonresidential Building Construction Advances in December

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Nonresidential building construction spending increased 1.7% in December after inching up 0.1% in November. For 2011, spending fell 4.0% from 2010.

“For lease” private projects spending slipped 0.1% following a 1.2% increase in November, which was revised up from a previously reported decline of 0.3%. For the year, for lease spending decreased 3.4%. Hotel construction dropped 2.3% after rising 2.1% in November. For the year, the measure plummeted 24.8%. Office construction was essentially unchanged, down 0.1% in December, following an increase of 1.6% the previous month. For the year, it fell 8.4%.

Construction spending for institutional projects was down 0.2%, after rising 0.5% in November. For 2011, spending dropped 4.6%.

Manufacturing construction spending surged up 13.4% in December after falling 4.0% in November. Despite the strong finish and increasing in nine of the previous eleven months, manufacturing construction spending fell 3.3% in 2011.

Notwithstanding concerns about Europe and oil prices acting as a drag on the U.S. expansion and thus nonresidential construction spending, the forecast is for spending totals to strengthen throughout 2012 and 2013 as the economy continues to grow and companies see the need to expand to meet rising demand. Low long-term interest rates continue to be a positive for those contemplating proceeding with a project. Increasing domestic demand and greater exports to Asia and South America are expected to more than offset the likely slowdown in exports to Europe.

The forecast is for nonresidential construction spending to increase 5.4% in 2012 and to strengthen in 2013, growing 8.2%.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

Monthly Figures*
(latest actual values)

3-Month
Moving Average

Actual

Forecast

Oct-11

Nov-11

Dec-11

Oct-11

Nov-11

Dec-11

2008

2009

2010

2011

2012

2013

Lodging

8.447

8.623

8.428

8.547

8.576

8.499

35.806

25.499

11.329

8.515

8.862

9.738

Month-over-Month % Change

-2.4%

2.1%

-2.3%

0.2%

0.3%

-0.9%

Year-over-year % Change (NSA)

-15.7%

-14.6%

-15.3%

24.7%

-28.8%

-55.6%

-24.8%

4.1%

9.9%

Office

34.315

34.870

34.852

34.504

34.717

34.679

68.563

51.908

37.573

34.415

36.568

40.345

-1.9%

1.6%

-0.1%

0.1%

0.6%

-0.1%

-5.8%

-1.5%

-1.9%

5.1%

-24.3%

-27.6%

-8.4%

6.3%

10.3%

Commercial (mainly retail)

43.506

43.796

43.929

44.815

44.080

43.744

86.212

54.069

40.522

43.488

45.122

48.729

-3.2%

0.7%

0.3%

-1.8%

-1.6%

-0.8%

11.0%

12.2%

13.2%

-3.9%

-37.3%

-25.1%

7.3%

3.8%

8.0%

Health Care

38.615

39.207

39.723

40.087

39.624

39.182

46.902

44.845

39.879

39.694

41.432

45.159

-5.9%

1.5%

1.3%

-2.4%

-1.2%

-1.1%

-4.8%

-4.7%

-2.3%

7.2%

-4.4%

-11.1%

-0.5%

4.4%

9.0%

Education

86.100

86.102

85.637

86.350

86.406

85.946

104.890

103.202

88.227

84.692

86.770

91.500

-1.1%

0.0%

-0.5%

0.7%

0.1%

-0.5%

2.5%

3.1%

2.9%

8.4%

-1.6%

-14.5%

-4.0%

2.5%

5.5%

Religious

4.042

3.875

3.972

4.140

4.020

3.963

7.225

6.192

5.208

4.152

4.121

4.417

-2.4%

-4.1%

2.5%

0.3%

-2.9%

-1.4%

-18.3%

-23.2%

-18.5%

-4.2%

-14.3%

-15.9%

-20.3%

-0.7%

7.2%

Public Safety

9.667

10.124

9.929

9.911

9.873

9.907

13.083

13.787

11.118

9.895

10.072

10.270

-1.6%

4.7%

-1.9%

0.2%

-0.4%

0.3%

-6.4%

-0.6%

2.4%

28.3%

5.4%

-19.4%

-11.0%

1.8%

2.0%

Amusement/Recreation

15.852

15.810

15.576

15.856

15.935

15.746

21.829

19.404

16.959

15.527

16.401

17.536

-0.3%

-1.5%

0.8%

0.5%

-1.2%

-6.7%

-7.8%

-4.1%

2.9%

-11.1%

-12.6%

-8.4%

5.6%

6.9%

Manufacturing

40.860

39.239

44.479

40.555

40.221

41.526

53.234

56.836

38.106

36.868

42.763

48.455

0.7%

-4.0%

13.4%

4.1%

-0.8%

3.2%

19.3%

20.4%

41.8%

31.0%

6.8%

-33.0%

-3.2%

16.0%

13.3%

Total**

281.404

281.646

286.525

284.764

283.453

283.192

437.744

375.742

288.921

277.246

292.110

316.148

-2.1%

0.1%

1.7%

0.2%

-0.5%

-0.1%

1.7%

2.8%

6.2%

8.4%

-14.2%

-23.1%

-4.0%

5.4%

8.2%

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
** Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.